resolution. Ellen Hilert (DoD Supply Discrepancy Report Sub-Committee Chair)
initiated Draft PDC 314 to propose procedures for GSA to reimburse the customer
and to then have DLA reimburse GSA. GSA would bill DLA for the customer’s
credits. Ellen requested assistance in identifying a DLA POC to assist in
continuing work on this Draft PDC.

b. ACTION: DLA (Michael Lane), by 17 January 2011, identify a DLA POC to
continue coordination on DRAFT PDC 314.

6. DLA Billing Issues There were two DLA billing issues discussed.
a. DAAS Bill Rejects:

i. DLA reported that as of October 2010 there was $1.8M in rejected
Interfund bills that failed DAAS DoDAAC edits. This creates manual
work for DLA and DFAS and delays bill processing. ADC 354 provides
information regarding DAAS edits on logistics bills and requisitions,
including DoDAAC authority code edits implemented by ADC 262 that
restrict designated DoDAACs from being used as requisitioning and/or
bill-to DoDAACs. DAAS edits reject requisitions and bills in cases where
the requisitioning DoDAAC or the bill-to DoDAAC is not a valid
DoDAACs. DAAS edit rejects occur either because these DODAACs are
not active DoDAACs on the DLA Transaction Services authoritative
database or do not have the correct authority code for these transactions.

ii, At November 2009 Finance PRC, DLA reported an absolute value of
$5,263,355 in rejected bills. Research indicated that many rejected bills
were the result of:

(1) _ requisitions with DoDAACs that had passed DAAS edits but
were billed after restrictive authority codes were put in place
for those DoDAACs;

(2) DoDAACs that were valid at the time of requisitioning but had
been in “deleted” status for more than five years (and been
removed from the DAAS authoritative DoD Activity Address
Directory database) before the bill was processed in EBS;

(3) Military Assistance Program Address Codes (MAPACs) being
used for billing.

iii. While progress has been made, there appear to be continuing gaps
allowing requisitions with MAPACs and with invalid DoDAACs to be
processed. Ellen Hilert indicated that the Defense Medical Logistics
Standard Support (DMLSS), DLA TVR and Subsistence Total Order and
Receipt Electronic System (STORES) transactions uses a multi-line
transaction that bypasses DAAS edits, which may be the source of some
errors.

iv. Karen Opie-Toler had a related question regarding the use of contractor
DoDAACs that cite a DFAS activity in the DoDAAC TAC 3, which may
be a practice employed by Army and others.

v. ACTIONS: Due by 10 December 2010:

1. DLA J8 (Cathy Shepard) check to see if DLA is employing the

DLA Transaction Services DoDAAD replicated database,
including the DoDAAC authority code, to screen DMLSS,
STORES and TVR transactions.


submit Supply Discrepancy Reports. As part of the research for this effort, it was
determined that DLA Enterprise Business System (EBS) is non-compliant with
MILS and DLMS in not having fully implemented the financial transactions for
billing adjustment requests and replies, (MILS FAE/FAR and DLMS
812R/812L), This is resulting in a labor-intensive email process and is causing
delays in the processing of adjustments. The DLA Finance Team took action
items to initiate a high-priority Systems Change Request (SCR) to resolve this
problem and to provide a copy of the guidance that initiated the current email
process. A proposed DLMS change may be required to document the “Interim”
process, pending the EBS systems change.
ACTIONS: DLA J8 ( Karen Opie-Toler and Michael Lane), by 3 December
2010:
i. Provide status on the EBS SCR submission.
ii. Provide guidance issued by DLA to use email transactions for billing
adjustment requests and replies.
iii. Discuss with FPRC Chair the need for a PDC documenting interim
procedures.

11. Non-Interfund Authority Code

a.

b,

Angel Sweetser (DFAS Columbus) suggested that a PDC be developed to add a
DoDAAC authority code for non-Interfund requisitioning and billing.

Authority codes were implemented in November 2009 to limit the use of
DoDAACs for certain purposes, such as requisitioning, billing or serving as a
ship-to activity. DAAS rejects transactions that fail these edits, including
requisitions and bills (see ADC 224 and 354). Prior to implementation of
authority codes, Air Force had initiated procedures with DLA Transaction
Services to limit certain Air Force DoDAAC series to non-Interfund
requisitioning only and to convert incoming requisitions to fund code “XP” for
non-Interfund billing (see ADC 110 series), The proposed PDC would remove
these Air Force unique edits and would provide a means for other

Components/A gencies to identify specific DoDAACs for non-Interfund
requisitioning and billing. Note that the current Air Force DoDAAC update
application does not have the capability to enter authority codes, so these are
entered using the DLA Transaction Services DoDAAC web update application or
by DoDAAC series with DLA Transaction Services assistance.

Bob Hammond offered to assist Angel in developing such a PDC. However, it is
DoD policy that Interfund billing be used, except as outlined in MILSBILLS
(DoD 400.25-7-M, paragraph 2.2.2.3 which must be considered. A review of Air
Force use of non-Interfund billing is indicated as part of PDC development.

12. DLA Logistics Management Standards Office Website. Bob Hammond provided a
demonstration of the information available from the DLA Logistics Management
Standards Office web site at http:/Avww.dla.mil/j-
G/dimso/eLibrary/Changes/approved4.asp. Some examples of key information include:

links to DLMS Committee information (including FPRC), Logistics Management
Standards Committee representatives (such as FPRC and Fund Code), DLMS Changes
(Proposed and Approved), and DLMS Supplements.


requested by Army, who implemented the capability on 1 November 2010.
Marine Corps, (POC Mr. Copeland) and Navy (POC Sharon Fry) have expressed
interest. Air Force has not expressed interest at this time. Ellen Hilert indicated
that this process also has potential application to DLA TVR and requested
assistance in obtaining a DLA TVR POC to discuss this.

ACTION: DLA J-8 (Karen Opie-Toler), by 1 December 2010, identify a TVR
POC.

3. FAA RIC Problem.

a.

Some FAA billings have RIC 570 vice RIC G69. Billie Davis, FAA, has indicated
that FAA is sending RIC G69. This problem was originally surfaced by Air Force
who implemented a temporary work-around pending correction. Roxanne
Degner, GSA, indicated that a programming change is expected to be
implemented to correct this error by the January mid-month billing cycle.
ACTION: GSA (Roxanne Degner), by 17 January 2011, provide
implementation status for the programming change to correct this error

4, Air Force Billing Problems Resulting from Partial Shipments,

a.

c

DLA Distribution Standard System (DSS) confirms based on partial shipments,
and DLA Enterprise Business System (EBS) bills based on these confirmations,
(ARO) vice the material release order (A5_). The possibility exists that some bills
will appear as duplicate billings. These bills don't contain suffixes on the
document numbers. The Air Force finance system had considered the same
document number with the same quantity to be a duplicate; however, Angel
Sweetser (DFAS) indicated that she believes that a programming change has been
implemented to account for this process and to eliminate manual research.

There remains a question regarding whether the DFAS centers charge by the
detail billing transaction and whether this DLA billing process of sending
multiple detail billing records for these partial shipments increases the cost for the
Components/Agencies. The extent of these partial billings is currently unknown.
ACTIONS: (Due by 1 December 2010):

i. DFAS (Angel Sweetser) report on whether Air Force has implemented a
programming change to accommodate the detail level partial billing
records described above.

ii. DFAS (Angel Sweetser and Dan Martin) report on whether DFAS
charges Components/Agencies for each detail billing record transaction
vice billing only for the Summary Bill.

5. GSA-Directed Shipments Lost at DLA-Operated Consolidation and
Containerization Point (CCP).

a.

GSA directs vendor shipment to customers through the DLA CCPs. If material is
lost and GSA has transporter proof of delivery (TPD) from the vendor, neither the
vendor nor GSA will reimburse the customer. DLA has no policy/process to
provide credit for CCP losses based upon submission of a Supply Discrepancy
Report (SDR) to DLA. GSA does not accept responsibility for CCP losses. The
volume of these types of lost items is small, but users get upset when they don’t
get credit. Additional time is lost due to lack of published procedures governing
this scenario, resulting in repeated follow-ups from the customer seeking


b.

2. DLA J8 (Cathy Shepard) provide examples for further research
of traditional non-TVR, non-STORES and non-DMLSS supply
transactions that are being rejected.

3. DLA J8 (Karen Opie-Toler) provide examples of contractor
DoDAACs citing DFAS as a TAC 3 billing address.

4. DLA J627 (Bob Hammond and Ellen Hilert) review the
possibility of DLA Transaction Services editing multi-line
transactions.

Non-Interfund Billing (XP Fund Code). DoD Financial Management
Regulation requires any military service that has the capability to use the
Interfund billing system to do so. Non-Interfund transactions increase processing
costs and processing time. In addition, they are a significant source of delinquent
receivables ($86M for DLA as of October 2010). DLA acknowledges that price
adjustment issues for STORES requisitions have resulted in Components using
non-Interfund transactions. DLA is working to correct those price adjustment
issues. DLA has held meetings with Military Services and DFAS client executives
to reduce the use of XP fund code requisitions, Subsequent to the FPRC, Bob
Hammond discussed this issue with Cathy Shepard and determined that assistance
FPRC may be useful in advancing the goal of reducing non-Interfund
transactions. Accordingly the action items below have been established.

i. ACTIONS:

1. DLA (Cathy Shepard), by 31 December 2010, provide a sample
listing of non-STORES, XP fund code transactions to Bob
Hammond to distribution to FPRC representatives by email to
review and provide assistance in determining the reason Interfund
is not being used.

2. All, by 31 January 2011, provide status to FPRC Chair and Cathy
Shepard of research accomplished. Note, if you do receive an
email by 31 December 2010, you have no action.

7. DLMS Manuals.

a.

Draft DODI 4140.01, which is pending approval, designates the publication of
MILS/DLMS manuals as Defense Logistics Manuals (DLMSs). This would
include MILSBILLS (DoD 4000.25-7-M) and the DLMS Manual (DoD 4000.25-
M), which both contain financial procedures for the DoD logistics infrastructure.
In addition, Bob Hammond is working to update and combine the procedures
from the DLMS Manual (DoD 4000.25-M) and MILSBILLS (DoD 4000.25-7-M)
into a single manual. The ultimate goal is to incorporate all procedures into DLM
4000.25-M, Volume 4 - Finance. Revisions will be done through a series of
Proposed DLMS Changes (PDCs). PRC support in carefully reviewing these
PDCs will be needed.
a. ACTIONS. All, by 17 January 2011, review and provide
comments/updates to chapters two and three of the DRAFT DLMS below
i. Draft DLM 4000.25-3 MILSBILLS (http://www.dla.mil/j-
6/dimso/Archives/Finance/meetings/17Nov 10/DLM4000.25-3-

e2andc3.pdf)



13, Finance Training. Bob Hammond presented the DLMS Introductory Training Finance
Module and presented training on how to read the DLMS Supplement 810L — Logistics
Bill. The purpose of the training was to assist in understanding the DLMS process and in
interpreting DLMS Supplements.

14. DLMS Migration Status. Bob Hammond provided a status update on migration from
fixed 80 record position MILS transactions to variable length DLMS transactions. In
October 2010, 63% of transactions in and out of DLA Transaction Services were DLMS
transactions. ‘

15. Process Review Committee (PRC) Survey. A review of surveys provided by FPRC
representatives at the conclusion of the meeting indicated a desire for more frequent
FPRC meetings and provided other valuable feedback on the meeting. FPRC Chair, Bob
Hammond, greatly appreciates the feedback to improve the FPRC process. Thank you
all for participating in the meeting and for providing this feedback.


DEFENSE LOGISTICS AGENCY
HEADQUARTERS
8725 JOHN J. KINGMAN ROAD
FORT BELVOIR, VIRGINIA 22060-6221

REFER 10 J627 November 24, 2010

MEMORANDUM FOR SEE DISTRIBUTION

SUBJECT: Defense Logistics Management Systems (DLMS) Finance Process Review
Committee (FPRC) Meeting, November 17, 2010

The attached minutes of the DLMS FPRC meeting are forwarded for information and
appropriate action. Request cooperation of all concerned to respond within prescribed
timeframes. The next meeting will be scheduled at a later date.

The DLA Logistics Management Standards Office point of contact is Robert Hammond,

703-767-2117 or email Robert. Hammond@dla.mil.

INALD C. PIPP
Director,
DLA Logistics Management
Standards Office

Attachment

ce:

ODASD(SCI)

Finance PRC Committee


ii. DLM 4000.25, Volume 4 - Finance (http://Awww.dla.mil/j-
6/dimso/Archives/Finance/meetings/1 7Nov10/DraftDLM4000p25

v4Ch2and3.pdf)

8. Interagency Agreement (IAA).

a.

The Interagency Agreement is proposed by Treasury and the Office of
Management and Budget (OMB) to be the new standard agreement form for
capturing the detailed information required for processing reimbursable and
assisted acquisition agreements with the goals of providing consistent, uniform
information and financial facilitating eliminations. A longer term goal would be to
automate the IAA process. OMB and Treasury are considering requiring the use
of the IAA for all elimination levels and for transactions previously exempted
from the Financial Systems Integration Office reimbursable process, including
fleet, fuels, and DoD Interfund transactions. A financial elimination is simply the
process of accounting for and “eliminating” transactions between the same
organization or organizational hierarchy so as not to overstate sales. There are
various levels of eliminations. For example transactions can be eliminated within
agencies (Army to Army) within DoD (Army to Navy), within in the Federal
Government ete. ‘This is similar to the commercial practice of businesses
“eliminating” sales/transactions between their business units,

The IAA would require significant data to be exchanged between trading partners,
which is not possible using MILS transactions, but could be accomplished in the
long-term using DLMS. However, because of the adverse operational, mission
and cost impacts to DoD, and because Interfund billing is a highly efficient
automated process that fully supports eliminations, OSD Comptroller has opposed
extending this proposed process to Interfund. OMB and Treasury are planning
further pilots to assess the proposed JAA.

FPRC Chair, Bob Hammond, and DFAS, Dan Martin, Nicolas Bell, and Bruce
Stahmer provided briefings on this topic that were similar to briefings provided to
OSD Comptroller.

9, Air Force Expeditionary Combat Support System (ECSS) Financial Implementation

a.

Cliff Klein provided a brief update on Air Force ECSS, however an ECSS
deployment schedule was not provided to him in time for the FPRC, In addition
draft slides provided to him included a comment that ECSS would be eliminating
“duplicate” MILS fields as a part of DLMS implementation. Ellen Hilert
requested information on this.

ACTION: Air Force (Cliff Klein), by 17 January 2011, provide deployment
schedule and identify the fields that ECSS believes can be removed in DLMS
transactions.

10. MILSBILLS — Credit Adjustment Process.

a.

Joshua Doroen (DFAS) provided a briefing on an ongoing Lean6 Sigma effort
between DFAS and DLA to improve the process for resolving “disputed”
transactions. Air Force reported $5.23M in disputed transactions with DLA and
reported that disputed transactions are taking an average of 87 days to resolve.
The disputed transactions result from a variety of issues, including. Air Force
failure to submit timely Material Receipt Acknowledgements and failure to


DEFENSE LOGISTICS AGENCY
HEADQUARTERS
8725 JOHN J. KINGMAN ROAD
FORT BELVOIR, VIRGINIA 22060-6221

IN REPLY

REFER T0 J627

MEMORANDUM FOR RECORD

SUBJECT: Defense Logistics Management System (DLMS) Finance Process Review
Committee (PRC) Meeting, November 17, 2010

Purpose: DLA Logistics Management Standards hosted the subject meeting at a
conference facility located at 2000 Corporate Ridge, McLean, Virginia. Defense Connect Online
(DCO) was used to provide real-time viewing of presentations for those participants calling into
the meeting. Discussion topics are noted below. A list of attendees is shown at Enclosure |. All
meeting handouts and briefings are available on the Finance Process Review Committee (FPRC)
Web page meeting agenda at http://www.dla.mil/j-
6/dlmso/Programs/Committees/Finance/financepre.asp

Brief Summary of Discussion: Bob Hammond, FPRC Chair, facilitated the meeting
discussions.

Review of Meeting Topics:

1. Standard Financial Information Structure (SFIS),

a. Bob Hammond gave a presentation on SFIS, followed by a detailed discussion of
Proposed DLMS Change (PDC) 365 - DLMS Revisions for SFIS.
(Supply/Finance). PDC 365 identifies SFIS data elements to be exchanged
between trading partners in the “Target” environment where it is assumed that
legacy DFAS systems will be retired and Enterprise Resource Planning Systems
(ERPs) will be doing the financial processing. SFIS is a common business
language that enables budgeting, performance-based management, and the
generation of financial statements. One aspect of SFIS is the replacement of the
long line of accounting with discrete accounting data elements. This was not
possible under the MILS fixed 80 record position transactions, but is now possible
under the variable length DLMS transactions. The fund code, signal code and bill-
to DoDAAC identify the appropriation chargeable from the DLA Transaction
Services authoritative source Fund Code to Appropriation Conversion Table,
which provides a “Single Source of Truth” or master data capability for all trading
partners. PDC 365 identifies two approaches for exchanging SFIS data. One
approach is to add all proposed SFIS data elements to the DLMS transaction and
to retain the fund code process until no longer needed to support the transition in a
mixed MILS/DLMS environment. Another approach to satisfy this requirement is
to add only the business partner number to the DLMS transactions, and then to
add the other SFIS data elements to the DLA Transaction Services fund code
table as discrete data elements to be exchanged by financial/supply systems

1


c.

through a referential/master data capability. The second approach would retain the
fund code permanently. Because of the potential operational impact, complexity,
and many staffing notes requiring review/action, a 60 day review period has been
established for PDC 365 to allow coordinated staffing and a thorough review. The
briefing slides and PDC 365 are posted on the agenda.

Discussion centered around the many staffing notes in the PDC requiring review
and action, including requirements for FPRC representatives to coordinate with
Component/Agency Fund Code Monitors to validate that sufficient fund codes are
available to accommodate the beginning and ending period of availability date for
each appropriation, and to clarify the need for the fund code symbols discussed in
the PDC. Army (Pam Lynch) indicated that an initial review indicated that Army
likely has sufficient fund codes available. Some additional questions and concerns
are discussed below:

i. There were questions and concerns regarding the approach of providing
discrete SFIS data in DLMS transactions for requisitions initiated outside
of Component ERPs, including offline ordering systems such as DoD
eMall, GSA Advantage, GSA Global, and orders initiated through
emergency call centers, STORES, FFAVORS, and some Tailored Vendor
Relationship (TVR) and Prime Vendor systems. This discussion included
the potential for human error from manual data entry that may cause
unmatched financial transactions and possible future requirements for
systems initiating orders outside of Component ERPs to maintain users’
ERP SFIS profiles. In addition to initial programming costs, real-time
interface with ERPs may be required to support this.

ii. There were questions about possible potential conflict between definitions
and business rules for SFIS data elements and date elements already in use
for logistics and financial processes. Some examples include the possible
need to keep DLMS/MILS “Project Code” separate from SFIS “Project
Identifier” (Ellen Hilert, DLA J627); “Work Order Number” which is
already in use in DLMS for Navy Base Realignment and Closure
implementation procedures (Ellen Hilert, DLA J627); DLA EBS “Cost
Center” and” Profit Center” data elements and possible use of SFIS “Cost
Objects” for competing purposes (Karen Opie-Toler, DLA-J8).

ACTIONS: (Due 17 January 2011)

i. ALL, ensure appropriate distribution of PDC 365 to ensure full
coordination; provide an initial response addressing all staffing notes.

ii. FPRC Chair (Bob Hammond), review the DLMS 812R — Request for
Billing Adjustment and 812L - Logistics Bill Adjustment Request Reply
to determine if the SFIS data element Business Partner Number (BPN)
should be included in these transactions.

2. Off-Line Ordering System- Funds Availability Check.

a.

There was a discussion of ADC 328 - “Off-Line” Requisition Processing: Internet
Ordering Application Request for Component Verification of Funds Availability
& Recording of the Financial Obligation. This ADC will establish a capability for
a funds verification check for off-line ordering systems, such as DoD eMall and
GSA Advantage, before orders process, and it will allow for recording the
obligation in Component/Agency financial systems. This capability was initially